Acute lung injury (ALI) remains a devastating syndrome affecting more than 200,000 patients annually in the U.S. with a mortality rate approaching 40%. Currently, there are no pharmacologic therapies that reduce mortality. Consequently, further research into translational therapies is needed. Stem cell-based therapy with mesenchymal stem cells (MSC) is one attractive new approach. MSC have the capacity to secrete multiple paracrine factors that can regulate lung endothelial and epithelial permeability, decrease inflammation, enhance tissue repair, and inhibit bacterial growth. In over 150 clinical trials registered with clinicaltrials.gov using MSC as therapy, over 2000 patients have received the cells without any major complications. Despite a favorable safety profile, however, MSC have the capacity for spontaneous malignant transformation following multiple passages in vitro as well as the ability to promote tumor growth in vivo. Recently, some investigators have found that microvesicles (MV) released by human MSC are as biologically active as the stem cells in part through the transfer and expression of MV mRNA in the injured tissue bed. In this application, I propose to study the biology and test the potential therapeutic use of human bone-marrow derived MSC MV as an alternative to cellular therapy in models of ALI. The overall hypothesis is that human MSC MV are biologically active, and that their therapeutic activity is primarily mediated through transfer of mRNA from the MV to injured lung epithelium and lung endothelium. In Aim 1, the primary objective is to study the biology of MSC MV and determine which components of the MSC MV are functionally active, using inhibitors of RNA and protein synthesis and transport. I hypothesize that MSC MV require the transfer of mRNA for key paracrine soluble factors from the MV to the injured lung epithelium or endothelium using a cell membrane receptor, such as CD44, for their therapeutic effect. In Aim 2, I will test the functional activity of human MSC MV on net fluid transport in human alveolar epithelial type II cells and on lung endothelial permeability to protein in human lung microvascular endothelial cells injured by an inflammatory insult, the main pathological features of ALI. I hypothesize that MSC MV will prevent the decrease in net fluid transport in injured type II cells by restoring the apical membrane expression of the major epithelial sodium channel, ENaC, and will reduce the increase in protein permeability in injured lung endothelial cells by preventing the formation of actin stress fibers. In Aim 3, I will determine if human MSC MV are biologically active in mice injured with E.coli endotoxin-induced ALI. I hypothesize that MSC MV will reduce endotoxin-induced ALI in mice by restoring lung endothelial and epithelial protein permeability, lung fluid balance and by reducing alveolar inflammation. These studies will provide novel insights into how MVs are released and the underlying mechanisms that explain why MSC MVs may be effective in tissue repair. Furthermore, the results may provide preclinical data that could facilitate development of MSC MV as a therapy for ALI.